This quarter, he seems to be bullish about commodities. David Tepper bought 13 new stocks in the second quarter 2011. In the second quarter, his top five largest new buys were: Mosaic Company (MOS), Western Refining (WNR), Google Inc. (GOOG), Calumet Specialty Products Partners L.P. Common Un (CLMT) and General Motors (GM).
The Mosaic Company is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients which are essential to farm the world’s food. The company has an expansive global distribution network integrated to North American production assets, which provides them access to the largest global markets. The world uses about 40 million tons of phosphate per year and is estimated to use about 60 tonnes of potash this year.
Tepper added 2,390,027 shares of Mosaic Co. to his holdings at an average price of $70.27 per share, for a 3.8173% impact to his portfolio. Previously, Tepper tested the waters with the stock and bought high and sold low. He bought a total of 325,000 shares in the first and second quarters of 2008, during which the stock was hitting all-time highs. Tepper sold 262,500 shares in 2008, and then the remainder in the following two quarters for under $40.
Mosaic Company has a market cap of $17.54 billion; its shares were traded at around $64.19 with a P/E ratio of 14.62 and P/S ratio of 1.76. The dividend yield of Mosaic Company stocks is 0.31%. Mosaic Company had an annual average earnings growth of 21.1% over the past 5 years.
In fiscal 2010, Mosaic earned free cash flow of $445 million, down slightly from $462 million in 2009, and significantly from $2.16 billion in 2008. Capital expenditures increased significantly during the last two years, but revenue also declined from $10.3 billion to $6.8 billion. In the quarter ended May 31, 2010, they raised company earnings to $649 million from $396 million a year ago. The increases were due to higher shipments, increased prices and strong operating performance. In the same quarter Mosaic made over $600 million in potash expansions to serve increasing world demand.
Western Refining (WNR)
Western Refining Inc. is an independent crude oil refiner and marketer of refined products headquartered in El Paso, Texas, and operates primarily in the southwestern region of the U.S., including Arizona, New Mexico and West Texas.
Tepper bought 2,798,374 shares of Western Refining at an average of $16.68 per share, which had a 1.1924% impact on his portfolio.
Western Refining has a market cap of $1.35 billion; its shares were traded at around $15.39 with a P/E ratio of 12.36 and P/S ratio of 0.17.
The company’s second quarter net income was $100.1 million, compared to net income of $14.4 million in the second quarter 2010. The improved results were due to stronger refining margins resulting from the price advantage of West Texas Intermediate (WTI), is a grade of crude oil that is lighter than crude. The company is focused on paying down its debt. By quarter end it had approximately $1.06 in debt and built up cash to $173 million, for a net debt of approximately $884 million.
Google Inc. (GOOG)
Google is the top Internet search engine that now offers dozens of products and web-related services.
Tepper owned Google stock back in the second quarter 2008. He bought 141,000 shares at an average price of $518.61, then sold 111,000 for a small profit at $541.79 per share. When the stock fell in the second quarter 2008, he sold his remaining 30,000 shares for $473.49. In the second quarter of this year, he bought 90,000 shares for $527.28 each.
Google has a market cap of $186.6 billion; its shares were traded at around $577.52 with a P/E ratio of 19.81 and P/S ratio of 6.36. Google Inc. had an annual average earnings growth of 58.4% over the past 10 years.
Google’s revenue in the second quarter of $9 billion broke a company record and represented an increase of 32% over last year. Revenues from their Google Sites, Google Network, and from outside the U.S. all increased. The company also has cash of $39 billion on its balance sheet and added 2,542 new employees.
Google has enjoyed a seemingly unassailable market share for several years, but in May 2011, the number of users dropped 15%. Visitors to Microsoft’s Bing, on the other hand, increased 53%. From May 2010 to May 2011, Google lost almost 16% of its market share, according to data from research firm Compete.
Calumet Specialty Products Partners L.P. Common Un (CLMT)
Tepper’s third-largest new buy is Calumet Specialty Products, an independent producer of high-quality, specialty hydrocarbon products in North America. Tepper added 366,762 shares of Calumet at an average price of $21.62 in the second quarter 2011.
Calumet Specialty Products Partners L.p. Common Un has a market cap of $764.17 million; its shares were traded at around $19.08 with a P/E ratio of 16.85 and P/S ratio of 0.35. The dividend yield of Calumet Specialty Products Partners L.p. Common Un stocks is 10.31%.
Calumet generated $99.39 million in free cash in 2010, increased from $78.14 in 2009, and losses in the two previous years. In the second quarter 2011 they reported a net loss of $7.7 million compared to a net loss of $0.9 million the previous year. At least $15.1 million of the loss was due to debt extinguishment charges and unrealized noncash derivative losses.
General Motors (GM)
General Motors Company is engaged in the designing, manufacturing and retailing of vehicles globally including passenger cars, crossover vehicles, and light trucks, sport utility vehicles, vans and other vehicles. GM is the world’s largest auto maker as of the first six months of 2011. It is about one-quarter government owned.
Tepper sold his 1,381,012 stake in the company that he bought last quarter for $34.93 per share. In the second quarter, he reinitiated a position of 173,367 at an average price of $30.7 per share. The impact to his portfolio was 0.1241%.
General Motors has a market cap of $39.47 billion; its shares were traded at around $25.99 with an P/E of 5.33 and P/S ratio of 0.29.
The car maker generated $2.8 billion in free cash last year, down from $19.8 billion in 1999 before it went bankrupt. It has had six consecutive profitable quarters now. Revenue in the second quarter rose to $39.4 billion from $33.2 billion a year ago. EBIT rose to $3 billion compared with $2 billion a year ago. Free cash in the second quarter was also increased to $3.8 billion from $2.8 billion. The company expects EBIT-adjusted in the second half of 2011 to be slightly lower than the first half based on the current industry outlook.
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